Intonation is the guitar's ability to stay in tune for the entire length of the fret board. Having correct intonation is vital to sound good, period. There is a simple way to test it, and the guitar doesn't even have to be in tune.
Okay, the 12th fret of the fingerboard is the middle of the scale. When the string plays the same note open and fretted at the twelfth, intonation is correct. To precisely check how accurate the intonation is, plug into a guitar tuner instead of tuning by ear. If the instrument is properly intonated, you will know it from this test.
On most guitars, intonation can be adjusted at the bridge, and with the adjustable truss rod inside the neck. NOTE: Adjusting the truss rod on a guitar should only be done by a qualified repairperson.
The slightest changes can affect a guitar's intonation. Changing strings on the guitar can change intonation. Temperature differences can cause the neck to shift and affect the intonation. It is very important not to subject your guitar to extreme temperatures or even sudden temperature changes.
To adjust or correct intonation you must alter the string length or scale length. With some bridges, adjusting the length of the string is simple. Each string has its own saddle with an adjustment screw, which moves the saddle forward and backward on the bridge.
Quick intonation check:
1. Play an open A (5th String) and listen
2. Play an A note on the 12th fret and listen
3. The note at the 12th fret should be one octave higher than the open string
4. Basically the two notes should sound the same, if the intonation is correct
5. Now do the same thing, only using an electronic tuner to check the intonation instead of your ears. Go through each six strings, checking the open string against the 12th fret.
Adjusting the intonation with a floating bridge or Floyd rose (whammy bar) can be tricky. Its take a little experimenting with string height, string gauges, and scale length. Again, I strongly recommend leaving truss rod adjustments to a professional.